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Regulatory changes drag on 2011 profit, Richter CEO says

This year's changes in pharmaceutical price regulations and drug subsidies will reduce the full-year profit of Hungarian pharmaceutical maker Richter Gedeon by HUF 7.1 billion, CEO Erik Bogsch told the press on Tuesday.

The increase of a special tax levied on drug companies and of pharmaceuticals sales- representative fees from July 1 will be responsible for HUF 4.1 billion of the total profit shortfall.

Richter will not be able to cut prices any more as a result of the changes, Bogsch said, noting that the company has about HUF 4.8 billion profit on sales of HUF 30 billion in Hungary.

The compensation of for next year is still uncertain, he added. Recent legislation has changed the earlier regulations regarding tax deduction of R&D expenses.